Sasol is expected to deliver a strong set of results for the six months ended 31 December 2020 (2021 financial half year), underpinned by a strong cash cost, working capital and capital expenditure performance despite the effects of the COVID-19 pandemic, a severe decline in crude oil prices and softer chemical product prices. In addition, our Lake Charles production was impacted by hurricanes experienced in the US Gulf Coast, resulting in lost production of approximately 300kt for the 2021 financial half year.
Shareholders are advised that, for the 2021 financial half year:
- The earnings per share is expected to be between R22,76 and R24,07 compared to the prior half year earnings per share of R6,56 (representing an increase of more than 100%);
- Headline earnings per share (HEPS) is expected to be between R18,59 and R19,78 compared to the prior half year HEPS of R5,94 (representing an increase of more than 100%); and
- Core HEPS (CHEPS**) is expected to be between R6,94 and R8,79 compared to the prior half year CHEPS of R9,25.
Sasolīs adjusted earnings before interest, tax, depreciation and amortisation (adjusted EBITDA*) is expected to decline by between 0% and 10% from R19,8 billion in the prior year, to between R17,9 billion and R19,8 billion. This decline results from a 23% decrease in the rand per barrel price of Brent crude oil coupled with lower sales volumes due to softer demand attributable to COVID-19 lockdowns and the aforementioned hurricanes impacting our gross margins adversely. This was offset by a strong cost performance, supported by delivery towards the US$1 billion integrated crisis response plan commitment.
Notable non-cash adjustments for the 2021 financial half year include:
- Unrealised gains of R5,4 billion on the translation of monetary assets and liabilities due to the 15% strengthening of the closing rand/US dollar exchange rate compared to June 2020;
- Unrealised gains of R4,7 billion on the valuation of financial instruments and derivative contracts; and
R3,3 billion gain on the realisation of the foreign currency translation reserve (FCTR), mainly on the divestment of 50% interest in the LCCP Base Chemicals Business.
Sasol will release its 2021 financial half year results on Monday, 22 February 2021. Sasolīs President and Chief Executive Officer, Fleetwood Grobler, and Chief Financial Officer, Paul Victor, will present the results. The pre-recorded presentation will be available on 22 February 2021 on the following link:
A conference call will also be hosted via webcast on 22 February 2021 at 15h00 (SA time) with Fleetwood Grobler and Paul Victor to discuss the results and provide an update of the business.
* Adjusted EBITDA is calculated by adjusting operating profit for depreciation, amortisation, share-based payments, remeasurement items, change in discount rates of our rehabilitation provisions, all unrealised translation gains and losses, and all unrealised gains and losses on our derivatives and hedging activities.
** Core HEPS is calculated by adjusting headline earnings with non-recurring items, earnings losses of significant capital projects (exceeding R4 billion) which have reached beneficial operation and are still ramping up, all translation gains and losses (realised and unrealised), all gains and losses on our derivatives and hedging activities (realised and unrealised), and share-based payments on implementation of Broad-Based Black Economic Empowerment (BBBEE) transactions. Adjustments in relation to the valuation of our derivatives at period end are to remove volatility from earnings as these instruments are valued using forward curves and other market factors at the reporting date and could vary from period to period. We believe core headline earnings are a useful measure of the groupīs sustainable operating performance. Adjusted EBITDA and Core HEPS are not defined terms under IFRS and may not be comparable with similarly titled measures reported by other companies. The aforementioned adjustments are the responsibility of the directors of Sasol. The adjustments have been prepared for illustrative purposes only and due to their nature, may not fairly present Sasolīs financial position, changes in equity, results of operations or cash flows.
